Nvidia’s stock has dropped 4.2% in recent days. This happened even after it got a U.S. government exemption. The exemption lets it sell advanced AI chips to China. Analysts at The Motley Fool and Wedbush say this is puzzling.
They point out that the stock should have gone up with the policy change. But it didn’t.
Key Takeaways
- Nvidia Stock Is Falling despite a chip exemption meant to ease export restrictions.
- Recent drops contradict initial optimism around the exemption’s economic benefits.
- Rising global tariffs and macroeconomic fears are cited as key drivers of the decline.
- Analysts compare the performance to broader tech sector struggles amid industry-wide uncertainty.
- The exemption’s limitations, including regional trade policies, may limit its impact on Nvidia’s valuation.
Overview of Nvidia’s Current Stock Performance
Nvidia’s stock is facing tough times. The Broad Slump in the tech sector is hitting it hard. Its stock has dropped by 18% so far this year.
Recently, Nvidia’s stock fell by 5.5% in just one day. This shows how volatile the market is. It’s even more volatile than Bitcoin.
Recent Trends in Nvidia Stock Prices
- Year-to-date (YTD) decline: 18% as of Q1 2025.
- Two-week drop of 20%, with prices swinging between $90.69 and $131.26.
- 30-day realized volatility hit 80, far exceeding peers like Microsoft and Apple.
Key Factors Influencing Market Movement
New tariffs and recession fears are causing the stock to drop. President Trump’s policies led to a 3% drop in the S&P 500 in April 2025. Nvidia fell 3.5% that day.
Goldman Sachs thinks there’s a 35% chance of a U.S. recession. This is making tech stocks even more uncertain. The Nasdaq Composite fell 10.42% in Q1, adding to the worry.
Comparison with Industry Competitors
Nvidia’s market cap has dropped by 19.59%. Let’s see how it compares to its rivals:
| Company | Stock Change YTD | Market Cap Drop |
|---|---|---|
| NVIDIA Corp. | -19.59% | 19.59% |
| Tesla Inc. | -35.7% | 35.7% |
| Broadcom Inc. | -27.56% | 27.56% |
The top 10 global companies lost 13.2% of their market value in Q1. Tech stocks were hit the hardest. Nvidia’s volatility shows it’s struggling in this tough time.
Understanding the Chip Exemption Impact
The U.S. chip exemption for advanced AI chips was meant to help trade. It was aimed at Nvidia’s global sales. But, its impact is smaller than many hoped.
What the Chip Exemption Entails
The exemption lets some AI chips go to China. But, they must follow U.S. rules closely. The main rules are:
- Only certain H100 and H800 chips are allowed
- No chips for military use
- Ships must be checked by the government
Limitations of the Exemption for Nvidia
Nvidia faces challenges in the Semiconductor Market:
- AMD and Intel get to sell more because of wider access
- Rules make it hard to work with Chinese tech companies
- Supply chain problems keep happening
Historical Context of Similar Exemptions
Before, exemptions for companies like TSMC and Intel helped a bit. But, they didn’t fix big trade problems. A 2019 study showed:
- Most exemptions gave a short sales boost
- But, sales didn’t stay up for long, just 6–8 months
- Uncertainty in the market often made benefits small
Broader Market Influences on Tech Stocks
The semiconductor industry is facing big challenges. These challenges affect Tech Stocks all over. Supply chain problems and U.S. tariffs are making chip production hard.
TSMC and Intel are feeling the squeeze. They’re seeing lower profits because of these issues. Companies are now thinking about how to price their products differently.
Current Semiconductor Challenges
Now, 15% of chip deals include clauses for tariff costs. This is making things tough for U.S. chip makers. They’re worried about trade issues.
Chinese buyers like Huawei are asking for 6-month payments. This is making it hard for suppliers to manage their cash.
Investor Sentiment Shifts
Stocktwits shows 68% of talks about tech stocks are about big economic risks. People are worried about:
- Geopolitical supply chain risks
- Margin compression fears
- Valuation multiples contraction
AMD and Qualcomm shares are moving like Nvidia. This shows the whole industry is under pressure.
Economic Headwinds
“Tech valuations now reflect 2008-era recession pricing despite strong innovation pipelines,” said Morgan Stanley’s semiconductor analyst.
Rising interest rates are making investors more cautious. The S&P 500 Tech Sector’s price-to-earnings ratio fell 22% in a year. This shows people are less confident in tech.
Energy costs for making chips went up 18% in Q3 2023. This is making it harder for companies to make profits.
Future Outlook for Nvidia Stock
Nvidia’s future depends on balancing politics with new ideas. Stock Market News shows analysts are hopeful, even with ups and downs. Strategic steps and outside factors will guide its path.
Analyst Predictions and Ratings
Big names like Morgan Stanley and Bank of America see Nvidia’s stock going up. Bank of America thinks it could hit $190. They praise Nvidia’s AI lead and growth in data centers.
They believe Vera Rubin will boost 2025 earnings. This shows they trust Nvidia’s products, even with current market challenges.
Potential Resilience Strategies
Nvidia plans to spend $400 billion in U.S. factories to fight tariffs. Half of its chips will be made in the U.S. soon. Vera Rubin and TSMC partnerships aim to solve supply chain issues.
Working with suppliers and building data centers fast shows Nvidia is ready for risks.
Long-term Considerations for Investors
Blackwell GPUs are in short supply, but Foxconn sees AI server demand growing. Politics might raise costs, but Taiwan’s chip lead is strong. Investors should watch how tariffs affect prices.
But AI’s special market might protect high-end products like ChatGPT. Stock Market News experts say to look beyond short-term ups and downs to AI’s lasting impact.
